The Economic Impact of Indiana's Nonprofits

Nonprofit organizations make significant contributions to the quality
of life for Indiana citizens and are also a major force in the state’s
economy.

A new report presents information on the size, composition and distribution
of paid employment in the private nonprofit sector in Indiana between
2000 and 2003. This report updates an earlier study that presented similar
data for 1995, 2000 and 2001 and it is part of a larger project—Indiana
Nonprofits: Scope and Community Dimensions—currently underway at
Indiana University. The project provides solid, baseline information about
the Indiana nonprofit sector: its composition and structure, its contributions
to Indiana, the challenges it is facing, and how these features vary across
Indiana communities. For more information about the project and to access
the full report, visit www.indiana.edu/~nonprof.

Key Findings

Nonprofit employment increased by over 5 percent between 2000 and
2003, while for-profit employment decreased by almost 6 percent. Government
employment increased by nearly 3 percent during the same period (see
Figure 1).

The gap between nonprofit and for-profit payrolls narrowed between
2000 and 2003, as did the gap between nonprofit and government payrolls.
Total nonprofit payrolls increased 17 percent, while for-profit payrolls
increased 1 percent and government payrolls increased 10 percent.

The gap between nonprofit and for-profit average weekly wages decreased
by $11 during the 2000 to 2003 period and the gap between nonprofit
and government weekly wages decreased by $13.

The nonprofit sector continues to be a major economic force in Indiana,
accounting for nearly one out of every 12 paid workers—more than
are employed in the state’s construction industry.

The 228,000 nonprofit employees in Indiana earned about $6.6 billion
in wages in 2003.

Nonprofit employment is not restricted to any one region of Indiana,
but is distributed broadly throughout the state.

About half (52 percent) of nonprofit employment in the state is in
health services, another 13 percent is in education and 12 percent is
in social assistance.

Most nonprofit employees (88 percent) work for charities, although
only 58 percent of nonprofit employers are charities.

On average, weekly wages for nonprofit employees are 14 percent lower
than those of for-profit workers and 13 percent lower than those of
government workers. However, nonprofit weekly wages are similar to for-profit
wages in industries where nonprofit employment is concentrated.

The Indiana nonprofit sector grew notably faster than the for-profit
sector between 2000 and 2003 and faster than the government sector between
2000 and 2002.

Overall wages for nonprofit employees in Indiana also increased faster
than those of employees in for-profit or government organizations, although
average weekly wages increased at a slower rate.

The growth share and rate of growth in nonprofit employment were
concentrated in social assistance and educational services.